Japan’s GPIF Reclaims World’s Largest Pension Fund Title

Japan’s Government Pension Investment Fund reported a 3.65% return in its fiscal year’s first quarter, which ended June 30, fueled by foreign equities and bonds, that raised the pension giant’s asset value to $1.73 trillion. The gains were down from 9.52% the previous quarter and 9.49% during the year-ago period.

With the performance, which added approximately $60.8 billion to the GPIF’s asset value, the pension giant reclaimed its title as the world’s largest pension fund, edging out Norway’s Government Pension Fund Global, which has an asset value of approximately 18,331 Norwegian kroner ($1.72 trillion).

The GPIF’s top-performing asset class for the quarter was foreign equities, which returned approximately 10%, or $41.1 billion, followed by foreign bonds, which rose 5.5% and contributed $22.4 billion to the fund. Japanese equities returned 1.75%, or $7.4 billion, while the worst-performing asset class was Japanese bonds, which lost 2.39% during the quarter, or approximately $7.4 billion.

The quarterly results for the asset classes narrowly beat their corresponding benchmarks, which rose 9.94% and 5.44%, respectively, for foreign equities and foreign bonds, while the domestic equities benchmark earned 1.69% and the domestic bonds benchmark was down 2.45%.

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As of the end of June, the GPIF’s asset allocation was 25.85% in domestic bonds, 25.34% in foreign equities, 24.45% in foreign bonds and 24.37% in domestic equities.

The pension fund also released its annual survey evaluating the stewardship activities of its external asset managers. The survey received responses from 717 companies, down from 735 the previous year, which equates to a 33.3% response rate, down slightly from 34% a year earlier, according to a report summarizing the survey results.

The GPIF reported that approximately 90% of the companies surveyed said they voluntarily disclosed nonfinancial information, including environmental, social and governance disclosure. It also said that only 96 companies have endorsed the Taskforce on Nature-Related Financial Disclosures and 35 companies responded that they have disclosed information in line with the TNFD recommendations. Meanwhile, 376 companies said they plan to disclose the information in the future, and 160 intend to disclose by 2025.

According to the GPIF, the main themes of ESG activities at surveyed companies were climate change, corporate governance and diversity. The most frequently cited theme was climate change, the same as in the previous year. The fund reported topics including capital efficiency, risk management and supply chain had a significant increase in the share of responses from the previous survey.

GPIF’s ESG Investments Outperform Tokyo Stock Index

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Tags: Asset Managers, ESG, First Quarter, foreign equities, Government Pension Fund Global, Government Pension Investment Fund, GPIF, Japan, Norway, Q1, stewardship, Task Force on Nature-related Financial Disclosures, TNFD, World's Largest Pensions

Activist investor Carl Icahn has spent decades attacking purported shortcomings of publicly traded companies, but on Monday he was on the other side of such disparagement, as he paid $2 million in penalties to the Securities and Exchange Commission.

Icahn, 88, failed to disclose that he had borrowed against his stake in his publicly traded company, Icahn Enterprises LP, in which he has an 85% controlling interest.

He pledged about two-thirds of his IEP units from 2018 to 2022 to several lenders, receiving up to $5.1 billion in personal margin loans, according to the SEC release. Icahn settled the charges without admitting or denying wrongdoing and agreed to pay $500,000 personally and $1.5 million from IEP in fines.

IEP, with a market capitalization of $7.7 billion, invests widely in areas ranging from energy to real estate.

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IEP stock has lost 68% of its value since short-seller Hindenburg Research charged in May 2023 that the famed investor had failed to make required disclosures. Icahn later filed an amended report to reflect his transaction. Upon the announcement of the fine payment Monday, Hindenburg has remained critical, writing on the social network X that IEP is “still operating a Ponzi-like structure” and added that it still is short the stock.

For his part, Icahn commented in a statement: “The government investigation that followed has resulted in this settlement which makes no claim IEP or I inflated NAV or engaged in a ‘Ponzi-like’ structure. We are glad to put this matter behind us and will continue to focus on operating the business for the benefit of unit holders.”

Icahn burst into public view in 1985 as a corporate raider, an investor who used borrowed money to take over companies and sometimes sell them for parts. His first such deal was Trans World Airlines in 1985, when he made a tidy profit by selling off its routes to other carriers. While many of his forays were profitable, he also had clunkers, such as a money-losing stake on car rental firm Hertz Global.